London. Year’s first results… and upcoming sales

[05/03/2019]

With the value of sterling contracting against the dollar over the last two years in reaction to Brexit, buying art in London has become slightly more attractive for a market whose principal language is the dollar. While Sotheby’s is claiming that its latest Impressionist & Modern Art sale attracted the most international list of registered buyers ever recorded in London (with participants from 51 countries), the overall results, just a few days before the major Contemporary Art sales, are not particularly impressive. Sotheby’s numbers seem more or less consistent with pre-sale expectations but are clearly disappointing compared to last year’s equivalent sales. Sotheby’s sold 82% of its lots for a total of $115.3 million (£87.7 million, of which £73.9 million for Impressionist & Modern Art and £13.78 million for Surrealist Art) versus nearly $164 million last year (28 February 2018). That’s a contraction of $49 million. Nevertheless, most of the masterpieces found buyers within their estimated ranges and the sold rate was generally good, with 91% for the Impressionist & Modern Art sale on 26 February. The results were less good at the Surrealist Art sale with five lots unsold out of 17 offered.

Among the most impressive results, we saw a drawing by Egon SCHIELE triple its high estimate to reach $2 million. A few minutes later, one of his paintings exceeded its high estimate by two million to finish at $14 million(Trieste Fishing Boat). A third work by Schiele (Sitzende, Rückenakt) failed against an estimate of £1 to 1.5 million. A lower estimate would almost certainly have triggered bidding. The star lot in Sotheby’s sale, Claude Monet’s Le Palais Ducal fetched a record for one of his Venetian paitings at $36.2 million. As for René MAGRITTE, highly present at these February sales, the results were ‘as expected’. The four works offered by Sotheby’s all sold. The most important, L’Etoile du matin (Morning Star), juxtaposing the face of an American Indian with that of Magritte’s wife, exceeded its high estimate by a million (at $6.9 million) and will now be part of an American collection.

The next day at Christie’s, Magritte’s largest ever painting, Le lieu commun, fetched $24.4 million, the artist’s second best-ever auction result… three months after his latest auction record. Demand is clearly strong for works by the Belgian Surrealist who has generated seven results above the $10 million threshold in less than two years… Overall, Christie’s did well in February with an impressive total of £165.4 million, its second best total ever recorded in London for Impressionist, Modern and Surrealist art. Like Sotheby’s, Christie’s managed to sell 82% of the lots, but several important works failed to sell, notably works by Bonnard, Matisse and even a work by Van Gogh (so rare and so sought-after by the world’s biggest collectors and museums). However, the biggest disappointment was Christie’s star lot, Claude Monet’sSaule pleureur et bassin aux nymphéas (Weeping Willow and Water Lily Pond). Shown on the cover of the sale catalogue, the work remained unsold despite the generally favourable market context for the Impressionist figurehead with a new auction record of $84.7 million hammered on 8 May 2018 at Christie’s New York (Nymphéas en fleur). In the end, the top-selling work at Christie’s was a Paul CÉZANNE still life (Nature morte de pêches et poires) that fetched $28.2 million. Edgar Degas’ Danseuses dans une salle d’exercice (Trois Danseuses) triggered a fierce bidding contest fetching $5.5 million versus a low estimate of one million, and new auction records were hammered for Paul Signac (Le Port au soleil couchant) at close to $26 million and Gustave Caillebotte (Chemin montant) at $22.1 million.

Turning to the upcoming Contemporary Art sales…

David HOCKNEY – now the world’s most highly valued living artist – features prominently in Contemporary Art catalogues with three works at Sotheby’s on 5 March and the same number at Christie’s the following day. The most impressive of these is a double portrait of Henry Geldzahler, chief curator of the Met in the 1960s (who died in 1994) and his companion Christopher Scott. This imposing canvas (210 x 300 cm) dated 1969 is expected to fetch around 40 million dollars at Christie’s, a price 40 times higher than its previous price on 17 November 1992 ($1 million at Sotheby’s New York). The most frequently represented artists (in line with current demand) are Pierre Soulages (two works at Christie’s on 6 March), Nicolas de Stael, Martin Kippenberger (three works each at Sotheby’s), Peter Doig (two at Christie’s and one at Phillips) and Gerhard Richter on whom we offer a special focus below.

Gerhard Richter: a billion dollars in five years

Any prestige Contemporary Art sale must have at least one work by Gerhard RICHTER. In terms of annual auction turnover, the German master is the 11th best performing artist in the world and his best paintings are worth millions. Last November, a lot consisting of two abstract compositions fetched $32 million (Sotheby’s NY, 14 November 2018) but the artist’s record dates back to 10 February 2015 at Sotheby’s in London with a result at $46.3 million. Richter is a market staple and is sought-after by lots of major collectors: over the last five years, his works have generated over a billion dollars at auction. Not surprising therefore that he is one of the best represented artists in the upcoming March sales with five works… three at Sotheby’s, one at Christie’s and another at Phillips.

A price multiplied by 53 in 22 years?

When you have a dynamic price momentum with significant upside potential, you often see lots of relatively quick resales. Lot 26 in Christie’s upcoming sale, Richter’s A B, Tower (1987), estimated between $3.9 and $6.5 million has come onto the market four times in the last 22 years. The successive results obtained bear witness to the rapid and spectacular rise in the value of Richter’s works: A B, Tower was first offered in 1997 and sold for $123,500 at Sotheby’s NY. In 2006, it reappeared in a Christie’s sale in London and multiplied its value by 10 ($1.2 million). Eleven years later (16 November 2017) it returned to the market (Sotheby’s NY) and tripled its previous price to $3.8 million… which is now roughly the low estimate for its sale today (6 March), while the high estimate of $6.5 million suggests its price could double again.

Guarantee Risk

The next day, Thursday 7 March, Phillips is hoping to sell Richter’s canvas Jet Fighter (1963). The work is being offered within an estimated range of $13 to 19 million whereas in 2016 it was estimated $25 to 35 million. In this particular case, the sharp drop stems from a serious case of over-optimism at the work’s previous sale in November 2016. Titled Düsenjäger, the canvas failed to reach its guaranteed price of $24 million. Contractually committed, Phillips had to pay the seller (Paul Allen, co-founder of Microsoft, who died last October) the promised $24 million, and a third-party guarantor refused to pay despite his obligation to Phillips. This illustrates guarantee risk: if the bidding fails to reach the minimum price, the guarantor has to buy the work. The loss was substantial for Phillips who, in addition to paying $24 million to the seller, incurred substantial legal costs trying to get the third-party guarantor, a rich Chinese businessman, to pay up. On 7 March, Phillips naturally hopes to recover part of the sum lost.